Kholongchhu to raise Nu 33.2B loan

House colony to be built by locals in Khetsang

Hydropower: In the latest development on the 600MW Kholongchhu project, the board of directors has approved the management’s decision to raise Nu 33.2B by June next year as the loan component of the project.

The board in the second meeting held on December 28, directed the management to seek debt financing from the financial institutions within the country and India as well.

The project cost at 2013 price level comes to Nu 38.7B and expenses for transmission would cost another Nu 8.86B, taking the total cost to around Nu 47B.

The actual debt financing for the project is estimated at Nu 27B. But another Nu 6.2B loan would also be raised for transmission.

While the debt component constitute 70 percent of the cost, the remaining cost (30 percent) comes as equity from the joint venture (JV) partners for the Kholongchhu- Druk Green Power Corporation and Satluj Jal Vidyut Nigam Limited (SJVNL), an Indian public sector undertaking.

The project’s chairman and economic affairs secretary, Dasho Yeshi Wangdi said about Nu 3.3B of loan would be raised from the local financial institutions to speed up the preconstruction activities.

Because securing loan would take time, the chairman said JV partners would be pumping in funds from their equity until June next year..

This is why, the board also decided to raise the share capital of the company from Nu 1B to Nu 2B.

The board also appointed consultants for the main components, including the design and specification of powerhouse, dam and tunnels.

“Unlike the other projects being built on inter-governmental model where a consultant is appointed by the project, Kholongchhu project has nominated three consultants who will bid for the works,” Dasho Yeshi Wangdi said.

Three central public sector undertakings from India-National Hydroelectric Power Corporation (NHDC), Tehri Hydro Development Corporation Limited (THDC) and Water and Power Consultancy Services (WAPCOS)- were nominated for bidding. “The best one will be selected,” the chairman said.

“The second board meeting has given the approval for further works at Kholongchhu,” he said.

He said the project’s business plan on civil and electrical works were drawn, target were set and budget was approved. The project is expecting to spend around Nu 1.6B next year alone.

One salient feature of the project, Dasho Yeshi Wangdi said was the integration of project’s housing colony with the new township coming up at Khetsang in Trashiyangtse.

This means that the project will not  construct its housing colony to avoid situations that surfaced at Bajothang for the Punatshangchhu project. Instead, the project authority would be providing the requirement of residential quarters for operation and maintenance of the project and the public will build the structures.

“But the project would be constructing schools and recreational facilities in the new township,” he said. “This will benefit the local community.”

An extraordinary general meeting was also conducted on the same day to approve the re-composition of board members.

The secretary said that there was a need felt to increase the number of board members from both the sides, Bhutanese as well as the Indian counterparts.

It was revealed that few board directors had to resign because of new appointment and transfers.

Tshering Dorji

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